Professional Documents
Culture Documents
of Ownership
Learning Objectives
Discuss the issues that entrepreneurs
should consider when evaluating
different forms of ownership.
Describe the advantages and
disadvantages of the sole
proprietorship.
Describe the advantages and
disadvantages of the partnership.
Describe the advantages and
disadvantages of the corporation.
Tax considerations
Liability exposure
Start-up and future capital requirements
Control
Managerial ability
Business goals
Management succession plans
Cost of formation
Landscaper
A landscaper may work alone or hire a small team of employees.
Landscapers maintain lawns, plants and trees of homeowners and
businesses. Most landscaping companies working with commercial
customers hire employees to work on projects.
Computer Repair Services
Computer repair companies are often operated as sole proprietorships.
Some business owners operate commercial shops, while others work from
home. Small computer repair businesses typically cater to individuals.
Catering Company
Catering companies offer their services for parties, weddings, church
functions and business events. In most cases, a sole proprietor operating a
catering company needs to hire employees.
Housecleaning Service
The start-up costs for a housecleaning business are generally low. Business
owners can offer a variety of additional services, such as laundry, window
washing and carpet cleaning.
Tutoring
Tutoring businesses provide learning assistance to students in a
variety of subjects. Tutors may work with students in person or
through online video chats. Many tutors have teaching experience or
extensive knowledge in the subject they are teaching.
Virtual Assistant
Virtual assistants help entrepreneurs with administrative functions
through the Internet. The tasks completed by virtual assistants
depend upon the needs of clients. Common tasks may include
checking emails, creating excel spreadsheets and typing documents.
Freelance Writer
Some freelance writers operate as independent contractors, while
others start small publishing companies. A freelance writer provides
content to businesses owners or writes content to sell to consumers.
Press releases, sales copy, website content and blog posts are
commonly provided by freelance writers.
The Partnership
A partnership is an association of two or more people
who co-own a business for the purpose of making a
profit.
In a partnership, the co-owners (partners) legally share a
businesss assets, liabilities, and profits according to the
terms of an established partnership agreement.
The law does not require a written partnership
agreement, also known as the articles of partnership, but
it is wise to work with an attorney to develop an
agreement that documents the exact status and
responsibility of each partner.
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Advantages of Partnership
Easy to establish
Complementary skills
For years, Norm Brodsky, founder of CitiStorage, a document
storage company in New York City, resisted taking on a partner
because he knew that many partnerships fall apart. Finally,
Brodsky brought his trusted friend Sam Kaplan in as a partner
because he saw that Kaplans values and philosophies were
similar to his own and that Kaplans strengths were skills that
he lacked. With his strong background in finance, Kaplan had
an immediate impact on the company. He took over the
management of Ministorage's finances and introduced
systems and practices that were rare in a small company.
While I still think its a bad idea to start a business with one,
Ive come to realize that ending with a partner is another
matterespecially if the other person is someone like Sam,
says Brodsky
Division of profits
Larger pool of capital
Ability to attract limited partners
Little governmental regulation
Flexibility
Taxation